MEDCO Ltd. was incorporated on 20th March, 2023, as a public limited company with the main objective to provide the consultancy services to businesses in Medical Sector, including supply of medical professional through o

CS Executive · Setting up of Business Entities and Closure · PYQS · December 2024
MEDCO Ltd. was incorporated on 20th March, 2023, as a public limited company with the main objective to provide the consultancy services to businesses in Medical Sector, including supply of medical professional through outsourcing. The Board of Directors in its meeting held on 16th June, 2024 approved the proposal to change the main object to start medical service with nominal charges by setting up hospitals, health centres and medical institutions for charitable purposes in interest of general public. The members of the Company also approved the proposal and accordingly application for conversion of the company into section 8 company is prepared. However, legal consultant opined that company must be running the business at least for 3 years prior to such application. Comment on following: (2) What additional matters to be considered by Registrar of the Companies, in case of conversion of the existing company into section 8 Company, as per MCA Notification no. G.S.R. 42(E) dated January 19, 2023.

Answer & Explanation:

The Ministry of Corporate Affairs vide notification no. G.S.R. 42(E) dated January 19, 2023 has amended the Rule 20(5) of the Companies (Incorporation) Rules, 2014. As per the notification, the Registrar of the Company shall after consideration two years financial statements immediately preceding the date of the application or when the company has functioned only for one financial year, for such year including Board's Reports and Audit Reports, relating to the existing companies and after considering objections if any received by it within thirty days from the date of the publication of notice, and after consulting any authority, regulatory body. Department or Ministry of Central Government or the State Government(s), as it may, in its discretion, decide whether the license should or should not be granted.

Topics: Company Law

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